Will County, fed up with fees, pulls some accounts from Harris; MB Financial wins business

Will County Treasurer Steve Weber has yanked $9.6 million in deposits from Chicago-based BMO Harris Bank and handed the funds to MB Financial Bank.

The BMO Harris accounts were advertised to the county as no-fee, but Mr. Weber, who took office in December, discovered the county was paying about $2,100 each month in fees for things like bounced checks from taxpayers, said Brian McDaniel, chief investment officer in the treasurer's office. BMO Harris wouldn't reverse the fees, so the county put the accounts out for bid.

“The fees we've seen have doubled from 2009 to 2010, and the amount of interest we earned on the deposits decreased 50%,” Mr. McDaniel said Wednesday.

He said the county thought it addressed the problem with BMO Harris, but later discovered it still was paying $500 annually in bank fees.

“We responded to the county's review process with a number of options to meet their financial needs, but they made a decision to pursue another solution elsewhere,” a BMO Harris spokesman wrote in an email.

The seven affected accounts, which hold payments for relatively small revenue streams like inheritance taxes and back-tax collections, represent just 3% of Will County's roughly $350 million in deposits and investments. At least seven local banks hold pieces of that pie.

After losing the seven accounts, BMO Harris still has $10 million in Will County deposits, but they are in a certificate of deposit that expires in March, Mr. McDaniel said. The county will take bids on those deposits at that time.

Representatives of MB Financial didn't immediately respond to a request for comment.

BMO Harris was Chicago's third-largest bank by deposits as of June 30, 2010, with $26.7 billion, while MB Financial was the 10th largest, with $8.4 billion, according to the Federal Deposit Insurance Corp.'s most recent data.